Economic pressure double-edged sword

The United States might view economic warfare against Iran as a relatively low-cost strategy. Sanctions, financial restrictions and trade controls can weaken an adversary without requiring US troops to enter the battlefield. For Washington, this approach might seem highly attractive: it imposes pressure while avoiding the immediate human and political costs associated with a conventional war.

For Iran, however, the consequences are fundamentally different. Economic warfare can directly affect ordinary people, deepen inflation, erode purchasing power, increase unemployment and create social and political pressure from within. Tehran, therefore, faces a strategic dilemma: absorbing prolonged economic pressure might endanger the stability of the state.

This is why Iran may seek to change the terms of the confrontation.

Rather than allowing the conflict to remain exclusively economic — an arena in which the United States possesses considerable advantages — Iran might consider military escalation. Such a confrontation would impose costs on Washington as well, potentially disrupting regional security, energy markets, shipping routes and the interests of US allies.

Iran's objective would not necessarily be to defeat the US militarily. Instead, the calculation could be to make the cost of continued economic pressure significantly higher for Washington and its partners. If economic pressure can be imposed at relatively low cost, Tehran may seek ways to ensure that the broader strategic consequences are no longer low-cost for its adversary.

There is also a domestic political dimension.

Iran is unlikely to simply wait for economic hardship to undermine its society. Under conditions of external confrontation, governments can attempt to transform domestic dissatisfaction into national mobilization. The presence of an external adversary can strengthen national solidarity, narrow the space for internal political divisions and shift public attention from economic grievances toward national security.

From Tehran's perspective, therefore, military escalation could potentially serve two purposes simultaneously: imposing costs on its adversary abroad while consolidating political authority at home.

Yet there is another dimension that should not be overlooked: the global financial system.

For decades, the international dominance of the US dollar has given Washington extraordinary leverage. Access to dollar-based financial institutions and international payment networks is an important component of US economic power. When sanctions are extended through secondary measures, however, they can also encourage countries to reduce their dependence on this system.

Governments and businesses that fear losing access to dollar-based transactions may increasingly seek alternative currencies, payment mechanisms and financial arrangements. This does not mean that the dollar will suddenly lose its global position. Its role remains deeply supported by the size of the US economy, the depth of its financial markets and the dollar's importance in international trade.

But there is a paradox: the more aggressively financial interdependence is used as a geopolitical weapon, the stronger the incentive becomes for other countries to diversify away from that dependence.

In the long term, this could contribute to gradual de-dollarization and the emergence of a more diversified international financial system. For Washington, therefore, the immediate effectiveness of financial sanctions may carry a longer-term strategic cost: encouraging the very alternatives that could gradually reduce the reach of US financial power.

This financial dimension is particularly important in the case of Iran. If Tehran believes that economic pressure is designed not merely to change specific policies but to weaken the country's long-term economic sovereignty, it may become more determined to build alternative trade and financial channels. Military pressure, diplomatic alignment and economic diversification could then become interconnected elements of a broader strategy of resistance.

None of this means that war would necessarily strengthen Iran. Military escalation carries enormous risks, including economic destruction, civilian casualties, regional instability and the possibility of a much wider conflict erupting. Iran would have to calculate carefully whether escalation could produce strategic gains without triggering an overwhelming response.

Nevertheless, the central logic is clear: Iran cannot indefinitely fight a one-sided economic confrontation on terms defined entirely by Washington. If economic pressure threatens to weaken the state from within, Tehran may conclude that changing the battlefield is preferable to simply absorbing the pressure.

This creates a fundamental paradox. What appears to be a relatively low-cost strategy for the US — economic warfare — can create incentives for Iran to choose a far more dangerous form of confrontation. At the same time, the extensive use of financial coercion may encourage other countries to search for alternatives to the dollar-based system, gradually challenging one of the foundations of US economic influence.

The question, therefore, is not simply whether Iran wants war. The deeper question is whether Tehran might eventually conclude that confrontation has become less dangerous than shouldering indefinite economic pressure.

For Washington, that is the strategic risk. Economic pressure may weaken an adversary, but if it simultaneously encourages military escalation, regional instability, and financial diversification away from the dollar, the instrument of pressure can begin generating costs for the country applying it.

The ultimate lesson is that economic warfare is not conducted in an economic vacuum. Its consequences extend into security, diplomacy, energy and the global financial system. Pressure may produce results, but when pressure leaves no credible path toward diplomacy, it can also transform a manageable economic confrontation into a much more dangerous strategic crisis.

The author is a Kurdish-Iraqi writer, journalist, and researcher.

The views don't necessarily reflect those of China Daily.

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